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Creation Date: Wed, 11 Jan 2012 GMT Investment activity forecast to bloom in 2012Investment activity is expected to gather momentum on the back of a boost in confidence this year, according to Jones Lang LaSalle’s (JLL) December National Insolvency Report, with portfolio managers “clearing the decks” in preparation for a market recovery. However, investment and development activity will continue to be hampered by access to finance, “particularly in smaller markets and secondary grade assets where long-tern tenant pre-commitments are difficult to lock in,” the report says. Nevertheless. JLL anticipates continued economic expansion, which will support rising demand for space in the retail, industrial and office sectors. “The current programs of asset sales by banks and other financiers, as well as portfolio realignment by institutional fund managers and A-REITs represents a recognition that markets are stabilising and that values in many cases have been calibrated.” The report considers secondary market sector sentiment, buoyed by survey results from commercial fund manager Balmain Funds that show respondents expect investment returns to stabilise. Despite the positive outlook, the results do not indicate a move by investors to aggressive investment behaviour, but one-third of respondents said they would be prepared to consider new investment purchases or property development. “While most respondents to the Balmain survey expect the market to be dominated by sellers, in fact, the gap between those survey respondents planning to invest and those planning to divest is relatively narrow (26 percent vs 29 percent),” the report notes. “By a small margin, the majority of respondents expect investment returns to be lower in 2012 than in 2011. Activity is expected to be strongest in the residential sector.” Forty percent of respondents said they expect their commercial property market returns (income and capital) to remain unchanged from the previous 12 months, while over 20 percent expected “slightly higher” returns.
SOURCE: http://www.propertyoz.com.au/Article/NewsDetail.aspx?p=16&id=5172
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